Liquidity Pool
Create Pools and Earn
Liquidity pools provide a passive income each time a trader completes a transaction in your pool.
About Liquidity Pools
A liquidity pool is a collection of piles of crypto tokens or funds secured in a smart contract so traders can exchange their digital assets at any time.
It is a pool where anyone can deposit their funds and receive rewards or tokens in exchange for providing liquidity to the Riverex platform.
The transaction relies on an Automated Market Maker (AMM) protocol, an algorithm that automatically sets the price of digital assets.
The AMM algorithm ensures that both asset prices in the pool maintain their value-to-price ratio at a constant of 1:1, providing a balanced market price.
Benefits of Liquidity Pools
Liquidity in the Market
Users are not required to connect to other traders and search for a specified asset price. The AMM algorithm adjusts the price of the tokens based on the asset proportion in the pool.
Better Price Balance
Since users transact in a pool instead of another trader, they avoid sellers who demand high market prices or buyers who devalue the market price, providing a smoother and balanced market for every trader.
Passive Income
For HODLERS, this is one great way to earn passive income by locking their funds in the pool. Users can create or add funds to a pool; the liquidity provider earns a percentage whenever traders swap their tokens in the pool.